Correlation Between Regis Healthcare and Mystate

Can any of the company-specific risk be diversified away by investing in both Regis Healthcare and Mystate at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Regis Healthcare and Mystate into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Regis Healthcare and Mystate, you can compare the effects of market volatilities on Regis Healthcare and Mystate and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Regis Healthcare with a short position of Mystate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Regis Healthcare and Mystate.

Diversification Opportunities for Regis Healthcare and Mystate

-0.48

Correlation Coefficient

Regis Healthcare  Mystate

Very good diversification

The 3 months correlation between Regis and Mystate is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Regis Healthcare and Mystate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mystate and Regis Healthcare is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Regis Healthcare are associated (or correlated) with Mystate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mystate has no effect on the direction of Regis Healthcare i.e., Regis Healthcare and Mystate go up and down completely randomly.

Pair Corralation between Regis Healthcare and Mystate

Assuming the 90 days trading horizon Regis Healthcare is expected to under-perform the Mystate. In addition to that, Regis Healthcare is 1.59 times more volatile than Mystate. It trades about -0.03 of its total potential returns per unit of risk. Mystate is currently generating about 0.18 per unit of volatility. If you would invest  375.00  in Mystate on October 22, 2024 and sell it today you would earn a total of  59.00  from holding Mystate or generate 15.73% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Regis Healthcare  vs.  Mystate

Regis Healthcare

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Regis Healthcare has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical and fundamental indicators, Regis Healthcare is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Mystate

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Mystate are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Mystate unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Regis Healthcare and Mystate

The main advantage of trading using opposite Regis Healthcare and Mystate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Regis Healthcare position performs unexpectedly, Mystate can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Mystate will offset losses from the drop in Mystate's long position.

The idea behind Regis Healthcare and Mystate pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.